Spying a pivot to ghost kitchens, Softbank’s second Vision Fund pours $120 million into Ordermark

“We’re building a decentralized ghost kitchen,” is a sentence that could launch a thousand investor calls, and Alex Canter, the chief executive officer behind Ordermark, knows it.

The 29 year-old CEO has, indeed, built a decentralized ghost kitchen — and managed to convince Softbank’s latest Vision Fund to invest in a $120 million round for that the company announced today.

“We have uncovered an opportunity to help drive more orders into restaurants through this offering we have called Nextbite,” Canter said. “Nextbite is a portfolio of delivery-only restaurant brands that exist only on UberEats, DoorDash, and Postmates.”

After hearing about Nextbite, Softbank actually didn’t take much convincing.

Investors from the latest Vision Fund first reached out to Canter shortly after the company announced its last round of funding in 2019. Canter had just begun experimenting with Nextbite at the time, but now the business is driving a huge chunk of the company’s revenues and could account for a large percentage of the company’s total business in the coming year.

“We believe Ordermark’s leading technology platform and innovative virtual restaurant concepts are transforming the restaurant industry,” said Jeff Housenbold, Managing Partner at SoftBank Investment Advisers, in a statement. “Alex and the Ordermark team have a deep understanding of the challenges that independent restaurants face. We are excited to support their mission to help independent restaurants optimize online ordering and generate incremental revenue from under-utilized kitchens.”

It’s an interesting pivot for a company that began as a centralized hub for restaurants to manage all of the online delivery orders coming in through various delivery services like GrubHub, Postmates and Uber Eats .

Canter is no stranger to the restaurant business. His family owns one of Los Angeles’ most famous delicatessens, the eponymous Canters, and Ordermark apocryphally started as a way to manage the restaurant’s own back-of-the-house chaos caused by a profusion of delivery service orders.

Now, instead of becoming the proprietor of one restaurant brand, Canter is running 15 of them. Unlike Cloud Kitchens, Kitchen United or Reef, Ordermark isn’t building or operating new kitchens. Instead, the company relies on the unused kitchen capacity of restaurants that the company has vetted to act as its quasi-franchisees.

Ordermark logos for some of the company’s delivery-only restaurant concepts. Image Credit: Ordermark

While most of the restaurant concepts have been developed internally, Ordermark isn’t above the occasional celebrity sponsorship. Its Nextbite service has partnered with Wiz Khalifa on a delivery-only restaurant called HotBox by Wiz, featuring “stoner-friendly munchies”.

The first brand Canter launched was The Grilled Cheese Society, which took advantage of unused kitchens at places like a Los Angeles nightclub and mom-and-pop restaurants across the East Coast to build out a footprint that now covers 100 locations nationwide.

It’s perhaps the growth of the HotBox brand that shows what kind of growth Nextbite could promote. Since the brand’s launch in early October, it has grown to a footprint that will reach 50 cities by the end of the month, according to Canter.

In some ways, Nextbite couldn’t exist without Ordermark’s delivery aggregation technology. “The way that Ordermark’s technology is designed, not only can we aggregate online orders into the device, but we can aggregate multiple brands into the device.”

For restaurants that sign up to be fulfillment partners for the Nextbite brands, there are few additional upfront costs and a fair bit of upside, according to Canter. Restaurants are making 30% margin on every order they take for one of Ordermark’s brands, Canter said.

To become a part of Nextbite’s network of restaurants the business has to be vetted by Ordermark. The company takes cues on what kinds of restaurants are performing well in different regions and develops a menu that is suited to match those trends. For instance, Nextbite recently launched a hot chicken sandwich brand after seeing the item rise in popularity on different digital delivery services.

Restaurants are chosen that can match the menu style of the delivery-only brand that Ordermark’s Nextbite business creates.

Behind those menus is Guy Simsiman, a Denver-based chef who is in charge of developing new menus for the company.

“We’re building things that we know can scale and we do a lot of upfront vetting to find the right types of fulfillment partners,” said Canter. “When a restaurant signs up to become a fulfillment partner, we’re vetting them and training them on what they need to do to … We’re guiding them to become fulfillment partners for these concepts. There’s a whole bunch of training that happens. Then there’s secret shopping and review monitoring to monitor quality.”

While Nextbite may be the future of Ordermark’s business, its overall health looks solid. The company is about to cross $1 billion worth of orders processed through its system.

“We are laser focused right now on helping our restaurants survive COVID and the best way we can do that is by doubling down on the incremental revenues of the Nextbite business,” said Canter when asked where the company’s emphasis would be going forward.

Nextbite is something we’ve been developing for a while now. We took it to market at the end of last year prior to COVID. When COVID kicked in every restaurant in America needed to be more creative. People were looking for alternative ways to supplement the loss in foot traffic,” he said. Nextbite provided an answer.

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Impossible Foods nabs some Canadian fast food franchises as it expands in North America

After rolling out in some of Canada’s most high-falutin burger bistros, Impossible Foods is hitting Canada’s fast casual market with new menu items at national chains like White Spot and Triple O’s, Cactus Club Cafe, and Burger Priest.

While none of those names mean anything to yours truly, they may mean something to our friendly readers to the North. However, I have heard of Qdoba, Wahlburgers and Red Robin. And Canadian customers can also pick up Impossible Foods -based menu items at those chains too.

Since its debut at Momofuku Nishi in New York in 2016, the Impossible Burger is now served in 30,000 restaurants across the U.S. and is available in 11,000 grocery stores across America.

The Silicon Valley manufacturer of meat substitutes expects that Canada, the company’s first market outside of Asia, may become its largest market — second only to the U.S.

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WildType is opening up a pre-order list for select chefs as it focuses on sushi-grade salmon

WildType, the startup making lab-grown salmon, is opening up a pre-order list for select chefs.

Although the company is as much as five years out from commercial production, according to founders, the company is looking to partner with select chefs around the country who want to incorporate their sushi-grade salmon product into their menus .

“We’re not launching right now. We’re releasing the news that we have the next iteration of the product,” said co-founder Justin Kolbeck, a former US diplomat who launched the company to address issues of food insecurity he’d seen firsthand while stationed in Afghanistan.

“[It’s] sushi or nigiri or sashimi that you would order at a sushi restaurant,” he said. So the product that WildType hopes to ship will be equivalent to the saku blocks of fish meat that sushi chefs carve to prepare salmon. “Chefs will take a fish apart into saku blocks which are ten to fourteen ounces of fish,” said Kolbeck. “They’ll cut out bits that go on nigiri and the bits that are left over are made into rolls. We’ve designed an initial product release that can serve all three of those form factors.”

The process is more difficult than simply culturing cells. According to Kolbeck and WildType’s other co-founder Arye Elfenbein, the company has developed its own technology for developing the scaffolding on which both the muscle tissue and fats can grow to replicate the taste and texture of wild caught salmon.

“We’re developing the cell lines ourselves, we’re developing the scaffolding, and we’re developing the nutrients that we need to grow and we’re developing the cultivators that the cells need to grow in,” said Kolbeck.

Image of WildType’s sushi-grade, lab-grown salmon. Image Credit: Arye Elfenbein/WildType

For the cultivated meat industry to reach its full potential, companies may need to differentiate their businesses to focus on a single element of the supply chain going forward, the founders said.

Already, companies like Future Fields are raising money to focus on specific examples of the cultivated food supply chain, and WildType considered going down that road itself, according to Elfenbein.

“What we’ve created is special in its ability to provide cells with the right signals to organize and mature,” said Elfenbein. “This is applicable to other species than the salmon that we have worked on… we basically create a scaffold that provides the right guidance in different places for cells to take up fats in different places or become more striated.”

Already WildType has created sushi-grade salmon that achieves equivalence when it comes to nutrition and when it comes to the healthy omega 3 fats that make salmon a healthier option for consumers.

WildType is already working with restaurants in San Francisco, Portland, and Seattle and is looking for chefs in other parts of the country.

Kolbeck thinks the timing is right for the company’s cultivated product. Consumers right now are coming to the realization that the supply chain for seafood is broken even as more shoppers are gravitating from the meat aisle to seafood in greater numbers.

From mislabeling of fish to the problems associated with factory fish farming, aquaculture and environmental degradation — along with the risks of chemically contaminated fish — shoppers who want seafood are also increasingly looking for more information about the provenance of the food they’re eating.

“The news is that we’re placing our bet on sushi as an industry where we can launch and make a big splash… pun intended,” said Kolbeck.

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